Otonomy Reports Fourth Quarter and Full Year 2021 Financial Results and Provides Corporate Update
February 28 2022 - 4:27PM
Otonomy, Inc. (Nasdaq: OTIC), a biopharmaceutical company
dedicated to the development of innovative therapeutics for
neurotology, today reported financial results for the quarter and
year ended December 31, 2021 and provided an update on its product
pipeline and corporate activities. The company will host a
conference call and webcast today at 4:30 p.m. ET to discuss recent
highlights and financial results.
“We are very pleased to have completed enrollment in both the
OTO-313 Phase 2 and OTO-413 Phase 2a trials ahead of schedule and
look forward to reporting the results from these trials in the
coming months,” said David A. Weber, Ph.D., president and CEO of
Otonomy. “We also expect to broaden the clinical data informing our
next steps for these programs with the ongoing higher dose
evaluation for OTO-413 and upcoming higher dose and bilateral
dosing safety evaluation for OTO-313. This is an exciting year for
Otonomy with multiple clinical trial readouts that will be
highlighted during our upcoming Investor R&D Event next
month.”
Otonomy Program Updates
- OTO-313: Phase 2 trial in tinnitus is fully enrolled
with top-line results expected in mid-2022; initiating safety
evaluation of higher and bilateral dosing. Otonomy has
completed the enrollment of 153 patients with persistent,
unilateral tinnitus of at least moderate severity in a Phase 2
trial of OTO-313 (target enrollment was 140 patients).
Patients were randomized 1:1 to a single intratympanic injection of
OTO-313 (0.32 mg) or placebo and are being followed for four
months. The primary endpoint is the same as reported for the
successful Phase 1/2 trial: a responder analysis based on the
proportion of patients who report a clinically meaningful
improvement in the Tinnitus Functional Index (TFI) from baseline to
Months 1 and 2 following treatment. To assess durability of the
OTO-313 treatment effect, the follow-up period has been
extended out to four months. Top-line results for all
timepoints are expected to be available in mid-2022. Additionally,
Otonomy is initiating a one-month safety study for bilateral and
higher (0.64 mg) dosing of OTO-313 with results expected in the
second half of 2022. Together, these clinical data are expected to
support an End-of-Phase 2 meeting with the FDA and inform the
design of the OTO-313 Phase 3 clinical program planned to start in
the first half of 2023.
- OTO-413: Phase 2a cohort in hearing loss is fully
enrolled with top-line results expected early in the second quarter
of 2022; clinical evaluation of higher dosing ongoing.
Otonomy has also completed enrollment in a Phase 2a cohort for the
highest OTO-413 dose (0.3 mg) evaluated in the initial Phase 1/2
trial cohorts. A total of 33 patients with hearing loss were
randomized 2:1 to receive a single intratympanic injection of
OTO-413 or placebo. Patients are being followed for three months
and assessed using three clinically-validated speech-in-noise
hearing tests. In addition, Otonomy is enrolling patients to
evaluate at least one higher dose of OTO-413 (starting with 0.75
mg). Each dose cohort is expected to enroll approximately 12
hearing loss patients randomized 2:1 to OTO-413 or placebo with
patients evaluated as in the Phase 2a. Based on results from the
Phase 2a and higher-dose evaluation, Otonomy expects to initiate a
full dose-ranging Phase 2 efficacy trial by the end of 2022.
- OTO-825: preclinical studies validate
therapeutic potential of GJB2 gene therapy for
congenital hearing loss with Investigational New Drug (IND) filing
expected in first half of 2023. OTO-825 is an AAV-based
gene therapy to restore hearing in patients with a mutation in the
gap junction beta-2 (GJB2) gene, the most common cause of
congenital hearing loss. Preclinical proof-of-concept results,
which have been presented at multiple scientific meetings,
demonstrate that a single administration of OTO-825 rescues hearing
loss and cochlear damage in two preclinical models representing a
range of hearing loss severity caused by GJB2 deficiency. A Pre-IND
meeting has been completed with the FDA and IND-enabling activities
are ongoing.
- OTO-510: preclinical development ongoing for novel and
proprietary otoprotection molecule. Cisplatin is a potent
chemotherapeutic agent that is widely used to treat a variety of
cancers in adults and children, however, it is commonly associated
with severe adverse effects including cisplatin-induced hearing
loss (CIHL). Otonomy has identified a novel series of molecules
with improved otoprotection in preclinical CIHL studies compared to
other agents in development. The goal of the OTO-510 program is
otoprotection without tumor protection.
- OTO-6XX: preclinical development ongoing for severe
hearing loss program. Otonomy is evaluating therapeutic
approaches to repair or regenerate cochlear hair cells that are
damaged due to noise, aging or exposure to ototoxic chemicals. This
mechanism is expected to be complementary to repair of cochlear
synapses, which is addressed by OTO-413.
Anticipated Upcoming Milestones
- Early second quarter 2022, announce top-line results for
OTO-413 Phase 2a cohort.
- In mid-2022, announce top-line results for OTO-313 Phase 2
clinical trial.
- In second half of 2022, announce safety results for OTO-313
bilateral and higher dosing.
- In second half of 2022, announce top-line results for OTO-413
higher dose evaluation.
- By end of 2022, initiate Phase 2 dose-ranging efficacy trial
for OTO-413 in hearing loss.
- In first half of 2023, initiate Phase 3 clinical program for
OTO-313 in tinnitus.
- In first half of 2023, file IND for OTO-825 in hearing loss
associated with GJB2 gene mutation.
Fourth Quarter and Full Year 2021 Financial
Highlights
- Cash Position: Cash, cash equivalents, and
short-term investments totaled $77.4 million as of December 31,
2021, compared to $86.3 million as of December 31, 2020.
- Operating Expenses: GAAP operating expenses
were $13.2 million for the fourth quarter of 2021, compared to
$10.1 million for the fourth quarter of 2020. For the full year
2021, GAAP operating expenses were $49.4 million compared to $42.6
million for 2020. Non-GAAP operating expenses, which exclude
stock-based compensation, were $11.3 million for the fourth quarter
of 2021, compared to $8.5 million for the fourth quarter of 2020.
For the full year 2021, non-GAAP operating expenses were $42.0
million compared to $36.5 million for 2020.
- Research and Development Expenses: GAAP
research and development (R&D) expenses for the fourth quarter
of 2021 were $9.7 million, compared to $6.4 million for the fourth
quarter of 2020. The increase for the quarter was primarily due to
higher development expenses for OTO-313 and OTO-413. For the full
year 2021, GAAP R&D expenses were $34.7 million compared to
$28.0 million for 2020.
- Selling, General and Administrative Expenses:
GAAP selling, general and administrative (SG&A) expenses in the
fourth quarter of 2021 were $3.5 million, compared to $3.7 million
for the fourth quarter of 2020. For the full year 2021, GAAP
SG&A expenses were $14.7 million compared to $14.6 million for
2020.
- Financial Guidance:
- 2022 Operating Expenses: Otonomy expects that
GAAP operating expenses will be in the range of $52-$54 million,
and that non-GAAP operating expenses will be in the range of
$42-$44 million.
- Cash Runway: Otonomy expects that its current
cash, cash equivalents, and short-term investments will be
sufficient to fund company operations into the second half of
2023.
Non-GAAP Operating Expenses
In this press release, Otonomy’s operating expenses are provided
in accordance with generally accepted accounting principles (GAAP)
in the United States and also on a non-GAAP basis. Non-GAAP
operating expenses exclude stock-based compensation. Non-GAAP
operating expenses are provided as a complement to operating
expenses provided in accordance with GAAP because management
believes non-GAAP operating expenses help indicate underlying
trends in the company’s business, are important in comparing
current results with prior period results and provide additional
information regarding the company’s financial position. Management
also uses non-GAAP operating expenses to establish budgets and
operational goals that are communicated internally and externally
and to manage the company’s business and to evaluate its
performance. The attached financial information includes a
reconciliation of GAAP operating expenses to Non-GAAP operating
expenses and a reconciliation of GAAP operating expense guidance to
Non-GAAP operating expense guidance.
Webcast and Conference Call
Otonomy management will host a webcast and conference call
regarding these program updates at 4:30 p.m. ET / 1:30 p.m. PT
today. The live call may be accessed by dialing (877) 305-6769 for
domestic callers and (678) 562-4239 for international callers with
conference ID code number: 5169343. A live webcast of the call will
be available online in the investor relations section of Otonomy’s
website at www.otonomy.com and will be archived there for 30
days.
About OtonomyOtonomy is a biopharmaceutical
company dedicated to the development of innovative therapeutics for
neurotology. The company pioneered the application of drug delivery
technology to the ear in order to develop products that achieve
sustained drug exposure from a single local administration. This
approach is covered by a broad patent estate and is being utilized
to develop a pipeline of products addressing important unmet
medical needs with a focus on hearing loss and tinnitus. For
additional information please visit www.otonomy.com.
Cautionary Note Regarding Forward Looking
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements generally relate to future events
or the future financial or operating performance of Otonomy.
Forward-looking statements in this press release include, but are
not limited to, statements related to the design and conduct of,
activity, enrollment plans and patient populations for, and timing
of initiation and results for current and planned clinical trials;
Otonomy’s development plans and timelines for its product
candidates and programs; the potential benefits and advantages of
Otonomy’s product candidates and programs; expectations regarding
preclinical programs, including the potential benefits, development
activities and plans to file an IND; expectations regarding
Otonomy’s ability to advance its pipeline and regarding upcoming
catalysts; Otonomy’s anticipated upcoming milestones; expectations
regarding operating expenses for 2022 and cash runway; and
statements by Otonomy’s president and CEO. Otonomy’s expectations
regarding these matters may not materialize, and actual results in
future periods are subject to risks and uncertainties. Actual
results may differ materially from those indicated by these
forward-looking statements as a result of these risks and
uncertainties, including but not limited to: delays and disruption
resulting from the COVID-19 pandemic and governmental
responses to the pandemic, including current and future impacts to
Otonomy’s operations, the initiation and progression of, and
enrollment in, its planned and current clinical trials, and patient
conduct and compliance; Otonomy’s ability to accurately forecast
financial results; Otonomy’s expectation that it will incur
significant losses for the foreseeable future; Otonomy’s ability to
obtain additional financing; Otonomy’s dependence on the regulatory
success and advancement of its product candidates; the
uncertainties inherent in the clinical drug development process,
including, without limitation, Otonomy’s ability to adequately
demonstrate the safety and efficacy of its product candidates, the
nonclinical and clinical results for its product candidates, which
may not support further development, and challenges related to
patient enrollment, conduct and compliance in clinical trials; the
integrity of patient-reported outcomes in its current and future
clinical trials; the risks of the occurrence of any event, change
or other circumstance that could impact the performance under or
give rise to the termination of any promotional, collaboration or
license agreements, or that could impact Otonomy’s ability to repay
or comply with the terms of the loan provided by Oxford Finance
LLC; side effects or adverse events associated with Otonomy’s
product candidates; Otonomy’s ability to obtain regulatory approval
and successfully commercialize its product candidates, if approved;
competition in the biopharmaceutical industry; Otonomy’s dependence
on third parties to conduct nonclinical studies and clinical
trials, and for the manufacture of its product candidates;
Otonomy’s ability to protect its intellectual property in the
United States and throughout the world and to ensure compliance
with various laws and regulations in countries in which it conducts
clinical trials; expectations regarding potential therapy benefits,
market size, opportunity and growth; Otonomy’s ability to manage
operating expenses; implementation of Otonomy’s business model and
strategic plans for its business, products and technology; general
economic and market conditions; and other risks. Information
regarding the foregoing and additional risks may be found in the
section entitled "Risk Factors" in Otonomy’s Annual Report on Form
10-K filed with the Securities and Exchange Commission (SEC) on
February 28, 2022, and Otonomy’s future reports to be filed with
the SEC. The forward-looking statements in this press release are
based on information available to Otonomy as of the date hereof.
Otonomy disclaims any obligation to update any forward-looking
statements, except as required by law.
Contacts:
Media InquiriesSpectrum ScienceCate CullenAccount
Director205.910.4443ccullen@spectrumscience.com
Investor InquiriesICR WestwickeRobert H. UhlManaging
Director858.356.5932robert.uhl@westwicke.com
Otonomy,
Inc. |
Condensed
Balance Sheet Data |
(in
thousands) |
|
|
|
|
|
As of
December 31, |
|
As of
December 31, |
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
Cash and
cash equivalents |
$ |
77,412 |
|
|
$ |
30,767 |
|
|
|
|
|
Short-term
investments |
|
— |
|
|
|
55,576 |
|
|
|
|
|
Right-of-use
assets |
|
12,696 |
|
|
|
14,082 |
|
|
|
|
|
Total
assets |
|
95,637 |
|
|
|
106,265 |
|
|
|
|
|
Long-term
debt, net |
|
15,997 |
|
|
|
15,158 |
|
|
|
|
|
Leases, net
of current |
|
12,400 |
|
|
|
13,847 |
|
|
|
|
|
Total
liabilities |
|
40,730 |
|
|
|
39,999 |
|
|
|
|
|
Accumulated
deficit |
|
(555,805 |
) |
|
|
(504,624 |
) |
|
|
|
|
Total
stockholders’ equity |
|
54,907 |
|
|
|
66,266 |
|
|
|
|
|
|
|
|
|
|
Otonomy,
Inc. |
Condensed
Statements of Operations |
(in
thousands, except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Years
Ended |
|
|
December 31, |
|
December 31, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
Product sales, net |
$ |
— |
|
|
$ |
53 |
|
|
$ |
125 |
|
|
$ |
273 |
|
Costs and operating expenses: |
|
|
|
|
|
|
|
|
Cost of
product sales |
|
— |
|
|
|
274 |
|
|
|
370 |
|
|
|
1,188 |
|
|
Research and
development |
|
9,678 |
|
|
|
6,374 |
|
|
|
34,673 |
|
|
|
27,997 |
|
|
Selling,
general and administrative |
|
3,494 |
|
|
|
3,692 |
|
|
|
14,707 |
|
|
|
14,575 |
|
Total costs and operating expenses |
|
13,172 |
|
|
|
10,340 |
|
|
|
49,750 |
|
|
|
43,760 |
|
Loss from operations |
|
(13,172 |
) |
|
|
(10,287 |
) |
|
|
(49,625 |
) |
|
|
(43,487 |
) |
|
|
|
|
|
|
|
|
|
Other expense, net |
|
(407 |
) |
|
|
(360 |
) |
|
|
(1,556 |
) |
|
|
(1,244 |
) |
Net loss |
$ |
(13,579 |
) |
|
$ |
(10,647 |
) |
|
$ |
(51,181 |
) |
|
$ |
(44,731 |
) |
|
|
|
|
|
|
|
|
|
Net loss per share, basic and diluted |
$ |
(0.20 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.81 |
) |
|
$ |
(1.10 |
) |
|
|
|
|
|
|
|
|
|
Weighted-average shares used to compute net loss per share, |
|
|
|
|
|
|
|
basic and
diluted |
|
67,807,995 |
|
|
|
52,257,321 |
|
|
|
63,441,330 |
|
|
|
40,845,844 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Otonomy,
Inc. |
Reconciliation of GAAP to Non-GAAP Operating
Expenses |
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Years
Ended |
|
|
December 31, |
|
December 31, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
(unaudited) |
GAAP operating expenses |
|
|
|
|
|
|
|
|
Research and
development |
$ |
9,678 |
|
|
$ |
6,374 |
|
|
$ |
34,673 |
|
|
$ |
27,997 |
|
|
Selling,
general and administrative |
|
3,494 |
|
|
|
3,692 |
|
|
|
14,707 |
|
|
|
14,575 |
|
Total GAAP operating expenses |
|
13,172 |
|
|
|
10,066 |
|
|
|
49,380 |
|
|
|
42,572 |
|
Non-GAAP adjustments |
|
|
|
|
|
|
|
|
R&D
stock-based compensation expense |
|
(915 |
) |
|
|
(632 |
) |
|
|
(3,355 |
) |
|
|
(2,456 |
) |
|
SG&A
stock-based compensation expense |
|
(942 |
) |
|
|
(950 |
) |
|
|
(4,039 |
) |
|
|
(3,642 |
) |
Total non-GAAP adjustments |
|
(1,857 |
) |
|
|
(1,582 |
) |
|
|
(7,394 |
) |
|
|
(6,098 |
) |
Non-GAAP operating expenses |
$ |
11,315 |
|
|
$ |
8,484 |
|
|
$ |
41,986 |
|
|
$ |
36,474 |
|
|
|
|
|
|
|
|
|
|
Otonomy,
Inc. |
Reconciliation of 2022 GAAP to Non-GAAP Operating Expense
Guidance |
(in
millions) |
|
|
|
|
|
|
GAAP operating expenses |
$52 -
$54 |
Non-GAAP adjustments |
|
|
Stock-based
compensation expense |
$10 |
Non-GAAP operating expenses |
$42 - $44 |
|
|
|
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